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World Business Today

News/Business. Colleen McEdwards, Pauline Chiou. The day's global business news with a focus on international business and market trends.

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CNN

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01:00:00

RATING

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Annapolis, MD, USA

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Comcast Cable

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Port 1234

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mpeg2video

AUDIO CODEC
mp2

PIXEL WIDTH
720

PIXEL HEIGHT
480

TOPIC FREQUENCY

U.s. 22, Libya 12, China 12, London 10, Gadhafi 7, Moammar Gadhafi 6, Europe 5, Howard Davis 5, Hong Kong 5, Egypt 5, Us 5, Beijing 4, New York 4, Brazil 4, Eugene Rogan 3, Eu 3, United States 3, Andrew Stevens 3, Saif Gadhafi 3, Tempur-pedic 3,
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  CNN    World Business Today    News/Business. Colleen McEdwards, Pauline Chiou. The day's  
   global business news with a focus on international business...  

    March 4, 2011
    4:00 - 5:00am EST  

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i saw him and he looked at me and he said, get your chapstick ready. so we're going to shoot that next summer, 2012 we're going to shoot that one. but i'm looking forward to it. two great roles for us. >> listen, thank you for all coming in. it's been most entertaining. hello, i'm monita rajpaul this morning. liberals are holding on despite air strikes on thursday led by forces of moammar gadhafi. nearly 180,000 people have fled
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to libya, tunisia, and egypt. many others are trying to get out. an association with the libyan leadership has cost one top english academic his job. director of the london school of economics resigned on thursday. the school says it'll give back the nearly $2.5 million received from a libyan charity. a government spokesman says this year's defense budget will grow by 12.7% compared with last year's increase of 7.5%. china's defense spending. a german official says the alleged shooter is a recently radicalized muslim who was apparently influenced by extremist islamist websites. officials say he acted alone.
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those are the headlines, "world business today" starts right now. good morning from cnn london, i'm charles hodson. >> and good afternoon from cnn hong kong, i'm andrew stevens. you're watching "world business today." our top stories this friday, march 4th, hopes are rising that the world's biggest economy will finally deliver a bumper jobs report. the head of one of britain's top academic institutions resigns over links with libya. and how to be happy in china. political leaders ponder that question at a key gathering in beijing. well, let's get straight to the markets. and the last trading day of the week seems to be off to a good start here in europe following strong performances from the dow.
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here we are at the moment in europe. up again, just very slightly for the zurich smi. ftse up .5%, and leading the pack is the cac by .5%. it was seeld some of the blues in have been shrugged off by the markets following a rally on wall street. we'll see what that continues in a friday session. let's quickly look at the currency markets. of course, we saw a great deal more strength in the euro after it jumped to a four-month high against the u.s. dollar on thursday. now coming away from that a little bit, but obviously underlying that, underpinning the euro was the central bank president. slightly caught investors offguard when he said interest rates may rise as soon as next month. people had been betting in terms of june or may.
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the yen at 82.44 to the dollar. investors across asia seem to be focusing pretty much what's going on in the u.s. we've got that better than expected jobs number out. it was a weekly jobs number which is providing a pretty strong indicator, at least that's how it's being seen for the u.s. economy. that rally overnight. and that helped the markets pretty much across the board here in asia. all four of the key markets up by more than 1.4%. there was a weaker yen against the u.s. dollar in japan, that helped the exporters. all in all, hong kong up 1.25%, shanghai 1.3%, and australia with a 1.2% gain. well, if you thought that was impressive, let's have a look at the u.s. markets. and essentially what we're looking at is the best sessions
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of gains so far this year for the dow in thursday's trading. encouraging report on jobs, which we had out on wednesday. ahead of the big jobs report later today, along with an easing of energy prices. dow up by 1.6%. the nasdaq, doing even better than that, very nearly 2% to the good, and the s&p 500 somewhere between the two, up by 1.75%. now, i think we're going to have a less feverish start when trading begins later on friday. this is a look at the futures market, and this is really flat. overall, looking to see whether that is going to continue. what i think will really be setting the tone for the trading day as i mentioned is the latest u.s. jobs report, the non-farm payrolls for february are due right before the opening bell. and, of course, come on the heels of good news on jobless claims.
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368,000 people filed for unemployment benefits in february. and while that obviously is a lot, it is actually the lowest figure since may of 2008. now, in terms of the unemployment rate, still grim. overall, though, it's improved from a financial crisis, the high of 10.1% october, 2009, not that much. the new figure for february will be about 9.1%. and economists estimate that 192,000 jobs were created during the month. so bear that figure in mind when you hear them, andrew. 192,000. >> it'll be interesting to see if they hit that. a lot of people saying the u.s. economy is growing perhaps a little more strongly than some are giving it credit for. anyway, let's bring you up to date on libya. and more bombs falling on eastern libya.
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this latest attack centered outside a military base near the town of ajdabiya. but the bombs are reportedly not doing any damage. it marks the third consecutive day that forces loyal to libyan leader moammar gadhafi have mounted an aerial assault in the east. this amateur video appears to be scenes of wednesday's bombing in the town of al brega. the chief of the oil company says it has cut the oil production in half. many of libya's oil workers are foreign nationals and tens of thousands of them are trying to get out. some 180,000 people have left libya since the rebellion began. the u.s. says it's bringing in military planes. and france says it will use charter planes to help transport home thousands of e egyptians who have escaped into tunisia.
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and the u.s. president says enough is enough. >> the violence must stop. moammar gadhafi has lost legitimacy to lead and he must leave. those who perpetrate violence against the libyan people will be held accountable. and the aspirations of the libyan people for freedom, democracy, and dignity must be met. >> barack obama with a message of reassurance to the libyan people. meanwhile, the u.s. treasury secretary was trying to relay his assurances to the u.s. markets. they're ready to tap up oil reserves if the unrest in libya affects supplies. nymex crude is still climbing. currently trading around $102.80 a barrel. it's up about 90 cents, but still off its recent highs. the same goes for brent, crude,
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as well, it's trading higher, up by $1.25 a barrel at $115.87 a barrel. well, staying with libya and contracts with that country have just cost the director of the prestigious london school of economics his job. he resigned on thursday saying agreements to accept libyan money for research, education, and consulting work have hurt the school's reputation for which he's responsible. moammar gadhafi son's received his education from the school. the ties are not just financial. now with more on howard davis' resignation. howard davis, truly one of the great and good of this country. why is he falling on his sword? >> basically he had a number of ties with the gadhafi family. he was at one point an adviser to the investment authority. but the reason he resigned was a
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personal decision. they only accepted it with reluctance and regret. he said it was an error in judgment for lse to accept the money. he put out a statement explaining his decision. he said i made a personal error of judgment in accepting the british government's invitation to be an economic envoy and advise their sovereign wealth fund. and he also pointed out, it turns out to be a mistake, there are risks involved with taking funding from sources like libya and they should have been weighed more heavily in the balance. the money that we're looking at here. the lse accepted about 1.5 million pounds from the charity. that is the same charity run by saif gadhafi. >> getting on to about $2.5 million. >> yeah, they've accepted nearly
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$500,000. that was the first. and then they also accepted about 2.2 million pounds to train libyan servants. and of that money, they've accepted about half of that. this is the money that's now been called into question. and there is an independent investigation ongoing to find out if these links were inappropriate. >> i understand the investigation is to be headed by lord wolf, the former lord chief justice. a very experienced judge. what kind of things is he going to be looking at? might he actually exonerate howard davis? >> he could. he was looking at whether or not it was inappropriate, how the decision was made to accept this money, what other conditions may have been attached in accepting this money. it is important to remember that saif gadhafi did great from lse. and it was -- it was a big influence howard davis had in lse accepting saif gadhafi and accepting the money afterwards.
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howard davis has said he didn't do anything wrong, necessarily. it was all above board, the work he did in terms of accepting this money. but he says it was an error of judgment. they should have weighted more heavily where this money was coming from. >> and there is an investigation -- part of the investigation to see if whether saif gadhafi's degree was plagiarized. that'll be interesting. >> his ph.d. was on the democratization and the role of civil society in the role of governance. and a lot of people are saying that study didn't pay off if he's making the statements he's making now. >> you have to learn the lessons of what you've been writing about yourself. andrew? well, charles, china's biggest political meetings of the year are getting underway. and coming up, we'll look at what you can expect from china's
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they're look over hong kong harbor. welcome back to cnn hong kong and cnn london, this is "world business today." we're going to move our focus a little bit further north now. and china has begun the annual meetings of its top political advisory bodies. the people's political consultative conference. it's run for about ten days. the two bodies will review the nation's economic policy and china's leaders are expected to unveil a new five-year economic plan plus gdp growth targets. last week it was signaled that
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the growth target will be around about 7% annually in china over the next five years. remember, this is a target. rising consumer prices obviously will be high on the agenda at these meetings. and earlier this day state media reported that china will boost its defense budget by nearly 13% in 2011 to $91.5 billion. china is now officially the world's second biggest economy. with us now to help explain what we can expect is the beijing correspondent for the financial times. and an interesting little side light that comes out of this meeting, as well, that china's leadership used to talk about a harmonious society in china and now seem to be talking about creating a happy society. just what can you tell us about that? >> well, the communist party loves to put slogans on the all the policy initiatives.
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i think there's really a decision been made to shift the country's energies more towards balanced growth, less focus on gdp growth for its own sake and more about redistributing some of the benefits from this growth. and really improving the well being of the people -- of the general populous. of course, whether they can do that quickly or not is another story. >> well, this is an enormous task, isn't it? i mean, just changing directions in the supertanker that is the chinese economy. what's the feeling you get that can they successfully change direction that quickly over the next five years to rebalance this economy this, of course, has been the big question for all the economists around the world. >> reporter: certainly not. if you look at some of the rhetoric around the last meeting five years ago when they set the last five-year plan, it was all
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about also changing the growth model and making more equitable and making better distributions of the growth. and we haven't seen any positive results of that. and things seem to have gone the other way and the income gap has gotten worse and the inequality in the general society seems to have increased. whether they could do or not is an open question. they seem to be more keen on it. they're talking about it more this time. but yeah, we'll have to wait and see. >> the wealth gap obviously is a major issue now for the chinese leadership, right? >> absolutely. i mean, you're hearing even the billionaires -- some of these billionaires in the chinese people's political consultative congress. they're talking about reducing
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the wealth gap. and clearly there's an understanding if this isn't dealt with, it could spill over into greater instability. what's happening in the middle east right now, obviously that's a really deep concern of the leadership here in beijing. >> okay. jamil, thank you very much for that. the big meetings going on in beijing, and they will continue over the next few days and we'll continue to report what comes out of them. meanwhile, japan says it will cut or may cut financial aid to china. japan's foreign minister has asked for a review of the financial aid to its giant neighbor because the gdp is larger than that of japan. thousands of jobs at stake. in a moment, the negotiations in washington that could deal a heavy blow to that $9 billion american sport. the details are just ahead on "world business today." only yoplait original has twice the calcium of the leading yogurt.
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welcome back. you're watching "world business today" live on cnn. yes, president barack obama and mexican president calderon have struck a preliminary deal on allowing cross-border trucking. mexico has slapped tariffs on more than $2 billion of u.s. imports to keep those trucks from crossing into the united states. the new deal will allow companies into the united states if they comply with safety and english language standards. and in return, the tariffs on u.s. goods will be lifted. the leaders of the two countries say the deal will make trade in north america more competitive. >> we're moving ahead with plans for a 21st century border so people and goods can cross securely and efficiently. we're working to coordinate and streamline regulations and get rid of unnecessary trade barriers to make it easier to do
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business together. we're making new investments in clean energy partnerships including green buildings and smart grid technologies. >> translator: the united states and mexico can and must make the most of the comparative advantages that make us unique as a region and would enable us to convert to turn north america in its entirety into the most competitive region of the world. i am convinced that together we can achieve this. >> the u.s. administration hopes to put the deal to congress by later this month. well, further south, brazil has reported its strongest economic growth in more than 20 years. in 2010, brazil's economy grew by 7.5%. but that growth may have come off the boil. in the fourth quarter, that rate slowed to 5% analyzed and inflation is rising. prices in brazil are gaining at the rate of 6.1%.
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that's still within brazil's rather flexible target rate for inflation of 4.5%. give or take 2% either way. that's rather easy for central bankers, i think, by comparison. anyway, andrew? >> that certainly is. okay. we want to bring you up to date on a story that is certainly raising a few eyebrows. and creating not a few worries in the u.s. among sports fans at the moment. american football team owners in the players union have agreed to one more day of negotiations. extensions of the talks a potential lockout in a sport worth an estimated $9 billion a year. representatives of the players and owners have been meeting in washington to decide how that money should be shared. failure to reach an agreement could mean lawsuits that might affect the 2011 nfl season. fans, non-playing staff, media, and advertisers would all suffer if a lockout goes ahead.
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>> yeah, indeed. who actually would lose? let's tease that out a bit, pack that out a bit. assistant coaches, non-playing staff. players, of course, would lose their salaries. and because playing careers are short, that means some players will never be able to recoup the loss. networks and sponsors would continue paying some $4 billion in rights fees to the league, but the networks -- but they would, of course, get that money back after a lockout unlike the players, but the network's ratings would have been dealt a huge blow, fans would lose the entertainment value of nfl games and those who buy luxury suites and club suites would have to make their ticket payments. but would likely to get refunds for lost games once matches resume. >> i guess at the end of the day you can say it is just a job for
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from cnn london, i'm charles hodson. >> and i'm andrew stevens at cnn hong kong. welcome back, you're watching "world business today." well, here we are 90 minutes into the last trading day of the week here in europe and elsewhere, actually.
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and we're off to a good start. here's how it's shaping up. we were seeing -- yeah, the gains are actually widening. now just sluggishly gaining a bit. .75% for paris and london and the dax going up. and here in london, shares of wpp are sharing lower although they just posted results for 2010 that beat expectations. that's thanks to a rebound in the u.s. market and does expect the momentum to continue this year. so i'm a little puzzled by that share price fall. it may be a classic pace of buy on the rumors, sell on the fact. wpp ought to be reassuring to investors, andrew. >> you'd think so, charles. it chimes with a lot of the numbers we're seeing out of the u.s. and what we're expected to see on those monthly jobless numbers
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expected to look pretty good. and that's what helped the asian markets, you see, make these pretty strong gains to closeout the week. all the key full markets over 1% higher. in japan, the market they're getting an added boost from a weaker yen. that helped the big exporters. particularly stocks like toyota. that stock up more than 1%, 1.2% to be precise. hong kong also up by 1.25%. and just on japan too. canon, the camera maker was up 2%. but generally, the more positive outlook for the u.s. economy plus weaker oil prices, which has been obviously dragging heavily on the market. weaker oil prices is taking a little bit of pressure off investors, charles. >> okay. let's all look at wall street. now, u.s. stocks had their best day of the year so far on thursday.
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i think the way it's going to be on friday is going to depend on that jobs report. non-farm payrolls for february, 192,000 seems to be the consensus forecast. more than that, we could see the dow rising and we could see it falling if it's less than that. in terms of thursday's session, the gains there were due to falling oil prices and good news on unemployment claims. looking forward to a good non-farm payroll, as well. allison kosik has the details. >> a pullback in oil prices gave stocks room to run thursday. oil prices eased on news that moammar gadhafi might agree to peace negotiations with rebels mediated by hugo chavez. that gave investors a chance to focus on more positive jobs data. the number o of americans filing new claims for unemployment benefits fell to the lowest level in almost three years. it's the best sign yet that the job market is improving and the stock market responded in a big way. the dow gained 191 points, its
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biggest single-day increase in more than three months. the nasdaq and the s&p 500 also posted big gains. there were encouraging signs from the retail sector too. a group of 25 u.s. retailers reported a combined 4.2% increase in february sales. high-end department stores like saks and nordstrom, jc penney also posted big gains as the americans bulked up their winter wardrobes to fight the cold. some stores got a chillier reception, though. sales at the gap fell 3%, target was also off the mark. analysts see some head winds for retail in march. producers are beginning to pass the price of oil, cotton, and other commodities on to consumers. that's likely to affect spending this month. and an april easter could limit march sales, as well. the government releases its highly anticipated monthly jobs report.
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analysts expect the report to show a february gain of 195,000 jobs. the unemployment rate is expected to move slightly higher. that's a wrap of the day on wall street. i'm alison kosik in new york. are you one of those people in the market looking for a job? do you use social media? well, if you answered yes to both of those questions, here's advice for you. your postings on sites like facebook could affect whether you actually get that job or not. >> we see a fair amount of racist remarks. we see a fair amount of flagrant displays of weapons and potential bombs. >> bombs? you'd be surprised. >> you would be surprised. >> reporter: meet max druker. for a price, his company will comb through the online presence of job applicants. >> do you think the workforce gets it that corporations are looking at this stuff hard? >> they understand employers are
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looking at this online. a lot of them are frankly lazy and they don't actually look and research what they've put out there and clean that up. a lot simply don't really care it would appear. >> you can imagine the first thing people think is it's a complete invasion of privacy. you're basically a hired snoop. what would you say to that? >> an employer has an obligation to conduct fair practice. there's no way they can do that by looking for people individual. >> give me an example. >> so an employer does a google search and come across you, for example, and turns out you posted on a pregnant blog recently. so that employer is exposed to the fact that you're very likely pregnant. well, it's going to be very difficult for that employer to ignore that information and thus you've been discriminated against. >> social intelligence takes safeguards to make sure that doesn't happen. they say they only provide information allowable under the federal credit reporting act. the search is limited to the
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public domain and there's a dispute resolution process where people can challenge any information they feel is incorrect. though he's run thousands of checks, he's still surprised about what turns up. >> so this individual, on his public profile is that this person has an assault rifle right here, there's a handgun, maybe hard to see right here, and there's a samurai sword. in addition this person -- and in addition -- it's a quadruple play, he's got a beer can with all of these weapons. >> violent behavior tops the list of employer concerns. but there's other criteria that may not be as obvious. >> for some employers, where it's relevant for the job, we can look for poor written communication and grammar skills. >> grammar. that's going to surprise some people. >> that is. but for a lot of jobs that's very relevant and that is legally allowable for the employer to make decisions about
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that. >> with a little care and the proper privacy controls, job seekers should be able to remain under the radar. cnn new york. >> i'm still stunned about the samurai sword. maybe it was a job as an arms dealer. well, mazda is recalling cars in the u.s. and because of this little guy. the yellow spider likes to build its web inside the fuel system. the webs can block the air intake line which causes the gas tank to crack. that means fuel could leak out and cause a fire. the recall covers the 2009 and 2010 models of the mazda 6. and there's been something like 20 reported infestations. but as yet, no fires. charles? now, changing gears, bahrain should be preparing for the
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formula one grand prix this friday, but the political unrest led the government to cancel the race. there's now talk of rescheduling it for november. in the meantime, testing begins for the australian grand prix in three weeks. drivers have been rehearsing or practicing in barcelona during the unscheduled down time. and they are raring to go racing. this driver is no exception. he is starting his second year with lotus racing. the team sponsored by this network, it should be said. richard quest took a ride with him earlier this year to find out how intense his world at work is. >> you're not losing control of this at all, are you?
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>> he needs to be able to control the slide. normally the back end of the car is sliding. you need to be able to correct that. and also be able to stop the car and predict the braking distances if there's an animal in the road, that causes incidents. the it's the basic stuff that you require to go around in the car. >> i'm getting back here. >> you have got to be joking. you have got -- >> it doesn't matter if it's a road car or a formula one car, i feel that all the senses, they suddenly switch on. that's when i feel like -- it's like playing a musical instrument, you can't think about it too much. it needs to happen naturally. this is crucial, i think,
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otherwise it's game over if you don't have that. winning is the passion. to become the champion, to be the best of these all very good teams and drivers is something that really motivates me. i never felt a fear when i race myself, but after my last accident at the end o st week or 10 days when they're due, and but that very, very quickly went away. as soon as my brain started to work again and i realized what happened and what was wrong. and we're all okay. everything's fine. that thought never came back again. >> we better make sure we're both comfortably strapped in. >> we're going to get moving here. first gear, second gear, and then after that, you don't need to touch the gears.
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>> i can sense when the guy who is driving the car or person who is driving the car, i can sense when the car is not being controlled. and it makes me a little bit nervous. i prefer to drive myself always. >> there we are. >> exactly. >> on the power. >> i don't want to have to pick up the cones. i'm not picking up the cones. >> you know, and i don't mean to be arrogant saying to someone can i drive? if we drive a car. it's not that i think i'm such a good driver that i can driver. but i feel generally in i'm life, i'm comfortable. >> a moose. a moose is ahead of us. i'm not going to go in the
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cones. yes! >> are you good enough? good enough to be f1 champion? >> absolutely no doubt in my mind. >> i reckon you need that sort of confidence to go with that sort of job. and we can report that richard did miss the moose too. >> mind you, the moose wasn't moving. it should be a moving moose. it should be a moving moose to be a real challenge. >> exactly. that could have been a much sadder end to the story if the moose was moving. anyway, we've government to say farewell for now. charles and i will be back later this day. i'm andrew stevens in hong kong. "marketplace middle east" is next.
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this week on "marketplace middle east." >> this is a clear warning to the libyan government that it must stop the killing. >> loud words and swift action from the international community. the u.n. slaps sanctions on libya. plus, unemployment, poverty, and a lack of opportunity for the region's youth. we take a look at the root causes of unrest. and rebounding from revolution. how tunisia is trying to bring back tourism. world powers took decisive action against moammar gadhafi this week as the u.n. security council took actions. they include a travel ban on the gadhafi family and top officials and a complete freeze on their assets. britain like the eu have pushed for sanctions.
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>> reporter: italian prime minister silvio berlusconi once posted about his close friendship with gadhafi. while former british prime minister tony blair has been described as a friend and adviser to the gadhafi clan. it's no surprise that they are among the favorite destination for libya's money. 7.5% of unicredit, 2% of fin jj mechanica less than 1% of the country's energy company and 7.5% of uventus. here in london, it's about real estate. they own several properties, including this historic one across the street from the bank of england. then there's this property in the middle of the commercial center of oxford street. in fact, all of this is just a small part of it. more than 70% is believed to be in cash or short-term financial
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investments. and much of it in u.s. banks. anti-corruption activists say it is critical to block gadhafi's access to these funds. >> if you are in control of the state, you have control over the state's assets. in the case of gadhafi, it's becoming increasingly clear that he has control over the libyan investment authority, which has tens of billions of pounds throughout the world, including -- according to some reports -- 20 billion pounds in london. >> reporter: this week the eu finalized tough sanctions against libya, but some have taken their own steps. the publisher of the "financial times" has frozen 3%. the u.s. has seized $30 billion in the u.s. the biggest of its kinds, that combined with eu sanctions officials hope will corner most of gadhafi's wealth. london for marketplace middle east. in neighboring tunisia, changes at the top this week.
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the country's prime minister stepped down. demonstrators demanded his resignation because his ties to the former president. tackling corruption are key to tunisia's ability to transform its economy and spur job creation. unlike its neighbors algeria and libya, tunisia does not sit on top of large oil and gas reserves, so it relies on tourism. it's the top foreign exchange earner bringing in about $2.5 billion and employs around 400,000 people. the majority of visitors come from europe predominantly france, italy, and germany. now the sector's trying to get itself back on its feet as neil curry found out. >> reporter: the beaches of tunisia have remained unchanged by regime change. the tourists have gone. hotel managers are hoping that's about to change. she says one month after the
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people's revolution, the hotel is slowly returning to work. she says we received a lot of support messages from our guests and they promised they'll return and help us out. tunisia is free, she says and the best days are ahead. at first glance, the city is a picture of nautical prestige. expensive yachts line the harbor while groups of people relax, share a coffee and a chat under the sunshine. this group of hotel workers, there's little else for them to do since their hotel is currently closed. >> most of the hotels are empty and the clients are afraid of coming to tunisia because the situation is not stable yet. i would like to assure tourists that the situation is stable and everything is good in tunisia thanks to the revolution, tunisia is now much better than tunisia was before. >> reporter: not everyone shares that view. in southern tunisia, more than
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5,000 economic migrants took advantage of looser border controls after the revolution to jump on a boat and seek work in europe. the exodus was centered as visitors were being urged to return. >> this is a dream place. they're rogue because people don't have a job for everybody. so those guys that arrive there will be on the black market, you know, and they will be, you know, used by people with no more honor, who will pay them very low. this is wrong, they should stay in their country and develop it. they have to be passionate. >> reporter: just a couple of months ago, more than 600 people filled this hotel to ring in the beginning of 2011. for many tunisians, the revolution has provided a happy new year. but it's keeping the champagne on ice for a little longer. up next, as protests
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continue throughout the middle east, we take a look at the root causes of unrest and the region's way forward with eugene rogan of oxford university. sweet & salty nut bars... they're made from whole roasted nuts and dipped in creamy peanut butter, making your craving for a sweet & salty bar irresistible, by nature valley.
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as you can see, markets in the middle east plummeted this week on the continued unrest in the region. the demonstrations prompted the sal tan to reshuffle his cabinet, and promised jobs and unemployment benefits for 50,000 workers. other leaders in the gulf are stepping up measures, as well. last month, bahrain's king estimated an extra $489 million on financial benefits. kuwait has financial support amounting to $818 million plus an additional $4,000 grant for every citizen while saudi's king unveiled new developments estimated to cost at least $36 billion including unemployment benefits designed to help young people with no work and improve funding for education and housing. funds have also been allocated
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to write off the deaths of deceased borrowers and even prisoners. well, rising youth employment are responsible for the protests despite the rising rate in the past two decades. the unemployed youth is 20%. and youth unemployment in latin america is over 16.5%. i sat down with eugene rogan to find out how it's not just creating jobs that is crucial, but also a sustainable democracy. >> democracy has to be taken, it can't be given. and democracy was taken through popular revolutions and that always brings turmoil and chaos. in a sense, before you can hope to see a stable market in egypt or tunisia, you're going to have to see those countries through this transition process where they develop the kind of
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democratic institutions. after they've got those in place, i think you could see a whole new renaissance in the arab worlds. >> you don't think there'll be a pushback against globalization as a result of of what we're seeing? you see the protesters on the street of egypt asking for wage increases, asking for new labor contracts. >> in a sense, that reflects how much they are linked to the global economy. after all, we've been seeing demonstrations like that in greece, ireland, and spain. so in a sense, that's part of being in the global economy of 2011. you can have a successful revolution topple a dictator, but whoever becomes the leader in egypt and tunisia has to face creating jobs in a harsh global economy. >> we know very little about the muslim brotherhood, for example, or the opposition in egypt and some of the parties in the region, which is saying something in itself. are we prepared for the fact that you could have this push by the islamic parties and not knowing where they stand economically or socially in terms of their policies? >> it's interesting to see how
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the muslim brothers in egypt are distancing themselves as power players. they won't field the candidate for the presidency, not looking for a majority in parliament. i think that reflects the fact maybe they don't have the answers on the economy and would like to be in a partnership with secular forces. i think as things develop in egypt, they're going to try to give everybody equal access and achieve greater stability by not trying to exclude certain political tendencies. >> do you see saudi arabia, bahrain, as the real hot spots outside of yemen that has a low per capita income? what most worries you of what we see today? >> i think both bahrain and saudi arabia face genuine demands by their populations. they have large populations, poverty, inequality. and so they're really moving as quickly as they can to try to keep a lid on the scope for popular demonstrations. >> how do you think this is going to end up? does it stabilize with a month or two for your view?
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i know it's the million dollar question. but have you given it much thought? >> my own view is we're going to see turbulence across the middle east and africa through 2011. i think we've seen change set in motion. and two examples of two discontented people overturning their governments. what's going to happen across the region is going to be either evolution where governments try to forstall or else outright revolution. >> eugene rogan of oxford university. to see more of that interview and more of the program visit cnn.com/mme. or send your comments, you can check out our website in arabic, as well at arabic.cnn.com/mme. and that's it for this edition of "marketplace middle east." thanks for watching. we'll see you next week.
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